Toys R Us net loss widens, but store sales improve

Toys "R" Us' net loss widened in the fiscal first quarter compared with the same period last year, but the struggling children's retailer posted gains in sales.

Wayne-based Toys “R” Us Inc.

The Wayne-based retailer said losses for the quarter ended May 3 widened to $196 million from a loss of $111 million in same period of 2013. Toys said the increased loss was because of decreased income tax benefit, and a rise in expenses.

Sales at U.S. stores open at least a year increased 4 percent, compared with an 8.4-percent loss in the first quarter of 2013. Sales at international stores rose 1 percent in the first quarter of 2014.

Total sales for the quarter rose 2.9 percent to $2.5 billion from the same quarter of 2013.

Adjusted earnings before interest, depreciation, taxes, and amortization was $33 million, down $6 million from the prior year's quarter.

Gross margin was down slightly, at 37 percent compared with 37.4 percent, because of the company's promotional efforts and "competitive pricing strategy," the company said in a statement.

Sales, general and administrative expenses rose to $917 million from $886 million the prior year. Included in the increased costs, the company said, were an additional $8 million in professional fees and $7 million in payroll expenses connected to the company's turnaround plan. Antonio Urcelay, the company's chief executive officer and chairman, said in a statement that "certain upfront costs" increased operating expenses but that "we believe these short-term costs will benefit the business in the long term."

The company, which has 879 stores in the United States and Puerto Rico, and 895 company-owned and licensed stores in 35 countries, had a rough 2013. Former Chief Executive Officer Gerald ("Jerry") Storch resigned, and Toys shelved its plan to return to public company status with an initial stock offering.

Earlier this year Urcelay presented a strategy called "TRU Transformation" that calls for improved inventory management and cost controls, as well as improvements in customer service, and online offerings, to boost revenue.

Toys R Us net loss widens, but store sales improve

Toys "R" Us' net loss widened in the fiscal first quarter compared with the same period last year, but the struggling children's retailer posted gains in sales.

The Wayne-based retailer said losses for the quarter ended May 3 widened to $196 million from a loss of $111 million in same period of 2013. Toys said the increased loss was because of decreased income tax benefit, and a rise in expenses.

Sales at U.S. stores open at least a year increased 4 percent, compared with an 8.4-percent loss in the first quarter of 2013. Sales at international stores rose 1 percent in the first quarter of 2014.

Total sales for the quarter rose 2.9 percent to $2.5 billion from the same quarter of 2013.

Adjusted earnings before interest, depreciation, taxes, and amortization was $33 million, down $6 million from the prior year's quarter.

Gross margin was down slightly, at 37 percent compared with 37.4 percent, because of the company's promotional efforts and "competitive pricing strategy," the company said in a statement.

Sales, general and administrative expenses rose to $917 million from $886 million the prior year. Included in the increased costs, the company said, were an additional $8 million in professional fees and $7 million in payroll expenses connected to the company's turnaround plan. Antonio Urcelay, the company's chief executive officer and chairman, said in a statement that "certain upfront costs" increased operating expenses but that "we believe these short-term costs will benefit the business in the long term."

The company, which has 879 stores in the United States and Puerto Rico, and 895 company-owned and licensed stores in 35 countries, had a rough 2013. Former Chief Executive Officer Gerald ("Jerry") Storch resigned, and Toys shelved its plan to return to public company status with an initial stock offering.

Earlier this year Urcelay presented a strategy called "TRU Transformation" that calls for improved inventory management and cost controls, as well as improvements in customer service, and online offerings, to boost revenue.